So every week you get 4.5btc interest on your 100. That 4.5 is then converted to ltc at that days price and then given to the user. Is this correct?

Correct

Coblee, did you buy tons of Litecoins? All those huge buy orders took the price up on BTC-e. It seems to be very profitable to get dirt cheap Litecoins, push the price up and pay interest in Litecoins.Just wondering...

Same question here...

I've bought only enough to pay the interest payments next week. Not enough to push the price up. But I did buy them before the run-up, so depositors will likely get more litecoins next Monday compared to the current exchange rate.

I plan to buy litecoins through the week so as to get the best price and minimize a run-up on Mondays.

By the way, I'm not doing this for profit. The .5% fee is basically for my time and effort. Also as long as pirate does not default, then I'm guaranteeing your coins. So if my wallet gets hacked or if btc-e gets hacked, I will personally cover all the loses.

Nice and honest answer. I like that.To pay the interest, how many coins do you have to buy every week?

Nice and honest answer. I like that.To pay the interest, how many coins do you have to buy every week?

I just buy however much I need to pay for interest. So if you deposited 100 btc, then every week I send 6.5 btc to btc-e and buy litecoins throughout the week. I can figure out the average exchange rate based on how many litecoins I get.

Good news for this week is that I got the coins for an exchange rate of 0.00164816.

Interest rate will probably be 4.5% a week. The risk is if pirate defaults, you will lose your bitcoins. Of course there's also risk of me running away with your coins. But I hope people trust me enough not to do that.

Why wouldn't someone just invest in a PPT that pays >6.5%/week, then turn the BTC dividends into LTC?

What might be useful is if you accepted deposits in LTC.

And paid out in LTC as well...

I would love to accept deposit in LTC. Problem with that is if LTC appreciates in value with respect to BTC, and then if you wanted to withdraw in LTC, I would have to take a loss to buyback those LTC.

To me the obvious solution to that problem is to just keep the user's balance in BTC. The simplest (but not best, most likely) solution is to just take the most recent price for BTC/LTC and use it to convert a deposit into BTC. This is susceptible to a user running up the price by buying a lot of LTC, then depositing it all before the price stabilizes, causing you to take a loss. A better solution would be to use the same average exchange rate that you are finding when paying interest, such that deposits of LTC are pending until the end of the interest period, at which point they are converted and put into the balance.

I feel like accepting LTC would make your PPT really stand out among the ones available, and it would help reduce the number of LTC you have to buy on the open market. Essentially what you would be doing is cutting out the share that the trading website takes, because instead of investors selling their LTC for BTC, then you converting BTC to LTC to pay interest, you just pay out some of the LTC sent to you.